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Facebook owner Meta to sack 11,000 workers after revenue collapse

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Mark Zuckerberg’s Meta is cutting 11,000 jobs, more than one in eight staff, after a disastrous collapse in revenue has left the company behind Facebook overstaffed and “inefficient”, the chief executive said in a note to staff.

However, Zuckerberg indicated he planned to continue backing the company’s controversial multibillion-dollar bet on virtual reality, saying the metaverse project was a “high-priority growth area”.

The first round of redundancies in the company’s history comes after its workforce peaked this year at 87,314.

In the note on Wednesday, Zuckerberg said Meta had overinvested at the start of Covid, banking that the increase in online activity would continue and accelerate even after the coronavirus pandemic ended.

“Unfortunately, this did not play out the way I expected,” he said. “Not only has online commerce returned to prior trends but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”

The reference to “signal loss” is thought to relate to Zuckerberg’s long-running dispute with Apple, which in 2021 limited the amount of data, or “signals”, Facebook could gather about the behaviour of iPhone users. That loss, Zuckerberg has regularly said, made it harder for small businesses to use Facebook adverts to profitably acquire new customers.

The company is offering US employees severance pay starting at 16 weeks, Zuckerberg’s note said, as well as six months of healthcare support. Those on immigrant visas would receive help from “dedicated immigration specialists” but Zuckerberg acknowledged that the cuts were “especially difficult if you’re here on a visa”.

Despite widespread criticism of Zuckerberg for the scale of his investment on the company’s virtual reality project, which has resulted in more than $10bn (£8.7bn) being spent on research and development each quarter, he insisted in the note that the pivot remained a “high-priority growth area”, alongside the company’s TikTok-style “AI discovery engine” and its ads and business platforms.

Instead, Zuckerberg explicitly pointed a finger at Apple’s privacy changes, saying the loss of data was one of the factors depressing Meta’s revenue.

Meta’s share price peaked in September 2021 at $379, shortly after the Apple system rolled out to all iPhone users. However, in the following months there was one bruising revelation after another, from quarterly earnings reports that demonstrated the immediate harm of the change, to a damaging set of leaks from the whistleblower Frances Haugen, and the company’s largest global outage in years.

Even its October 2021 rebranding, from Facebook to Meta, could not stop the downward trend, and the company experienced its largest stock price drop in January this year, plummeting more than a third in less than four weeks. It now sits at under $100, its lowest level since early 2016.

Meta has struggled as investors resisted Zuckerberg’s expensive dive into creating an immersive AI metaverse just as digital advertising – the company’s main engine of revenue – slowed.

“Mark Zuckerberg’s ‘mea culpa’ statement is unlikely to do the trick of reassuring investors, instead they may be further rattled by his admission he overestimated the company’s prospects,” said investment analyst Susannah Streeter at Hargreaves Lansdown.

Streeter noted that the focus for Meta will be to claw back revenue – a “monumental task” – with younger users “dancing to the Pied Piper tunes of TikTok, or setting up groups and channels on Discord and Telegram”.

“At the same time Meta funds are being poured down into the dark plumbing of the metaverse, and it’s highly unclear when revenues will emerge from this expensive venture.”

The scale of the redundancies is massive but is proportionally far lower than the chaotic dismissals at Twitter, where Elon Musk led a company-wide effort to cut 50% of the workforce in a matter of weeks. Musk’s aggressive job losses were almost immediately hit with accusations of breaches of employment law, for insufficient notice and a failure to ensure that the axe was wielded equitably.

“The Twitter scandal has lowered the bar so far that now it will be easy for Meta and other employers to make their redundancy processes look sophisticated and humane,” said Charlie Thomson, an employment law expert at Stewarts.

“Many of these organisations will offer exit packages to redundant employees in exchange for a settlement of potential claims, which can make alleged flaws in the consultation process somewhat academic. But there is still reputational cost to handling job cuts in a cack-handed manner. And if an employer annoys their staff enough, they might prefer suing over settlement.”

The same day as the redundancies were confirmed, the UK’s competition regulator, the Competition and Markets Authority, also began the formal process of forcing Meta to divest itself of animated gif search engine Giphy, which it had acquired in May 2020. The order requires Meta to work with the CMA to either sell or spin off Giphy as quickly as is practicable.


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Hollywood writers agree to end five-month strike after new studio deal

Hollywood writers are officially ending their five-month strike, after union leaders approved an agreement made with the Alliance of Motion Picture and Television Producers and sent the full details of the new contract to union members for ratification.

The Writers Guild of America (WGA) said in a statement on Tuesday evening that writers would be free to work starting after midnight local time, while a ratification vote takes place on a new three-year contract with Hollywood studios that won concessions on writers’ payment, terms with streaming shows, and the use of artificial intelligence.

Negotiators for the Writers Guild of America (WGA) and an alliance of studios, streaming services and production companies reached a tentative agreement on Sunday after five marathon days of talks.

On Sunday, the WGA hailed the three-year agreement as “exceptional – with meaningful gains and protections for writers in every sector of the membership”.

Late-night and daytime television shows are expected to return to the air quickly. But most TV and film productions cannot yet resume as the actors’ strike is still under way, and the strikes have already affected the production and release schedules for the coming months.

The move brings a dramatic chapter in Hollywood to a close after the strike – one of the longest in the industry’s history –brought productions to a halt, sending shockwaves across Los Angeles and beyond.

In May, the WGA voted overwhelmingly to authorize its 11,500 members to strike for the first time in 15 years amid stalled negotiations with major studios. Writers argued they were receiving worse pay and less stable work in the online-streaming era. The union also demanded additional protections around studios’ use of artificial intelligence.

Writers spent months on picket lines outside major studios from Los Angeles to New York, including Amazon, Netflix, Paramount and Warner Bros. A few months after the writers began their strike, the Hollywood actors’ union Sag-Aftra undertook similar action, in what amounted to a historic “double strike”, the first such action in over six decades.

The writers’ strike, which lasted 146 days, was just five days shy of becoming the longest strike in the guild’s history.

A summary of the deal with the studios was made public on Tuesday. Writers won concessions across multiple areas they said were crucial, including residual payments for shows on streaming platforms, more transparency on viewership numbers for streaming platforms such as Netflix, minimum numbers of writers for pre-development “mini rooms”, and guidelines for the use of artificial intelligence.

Members are set to vote on the deal between 2 and 9 October.

The agreement with the WGA came after negotiators renewed talks following a months-long impasse. Four top industry executives – Bob Iger, the Disney CEO; David Zaslav, the Warner Bros Discovery CEO; Ted Sarandos, the Netflix co-CEO; and Donna Langley, the NBCUniversal Studio group chair – took part in this week’s negotiations.

Demonstrators rally outside the Paramount Pictures Studio this week. The writer’s strike was one of the longest in Hollywood history.
Demonstrators rally outside the Paramount Pictures Studio this week. The strike was one of the longest in Hollywood history. Photograph: Jae C Hong/AP

The end of the Hollywood actors’ strike may not be on the horizon yet, but the deal for writers has ignited a new spirit of optimism and animated those who are still picketing. The deal could provide a path forward to resolve the actors’ strike, as the WGA agreement addresses concerns similar.

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“For a hot second, I really thought that this was going to go on until next year,” said Marissa Cuevas, an actor who has appeared on the TV series Kung Fu and The Big Bang Theory. “Knowing that at least one of us has gotten a good deal gives a lot of hope that we will also get a good deal.”

Writers’ picket lines had been suspended, but they were encouraged to walk in solidarity with actors, and many were on the lines on Tuesday, including Mad Men creator Matthew Weiner, who picketed alongside friend and ER actor Noah Wyle, as he has throughout the strikes.

“We would never have had the leverage we had if Sag had not gone out,” Weiner said. “They were very brave to do it.”

Striking actors have also voted to authorize their leadership to potentially expand their walkout to include the lucrative video-game market, a step that could put new pressure on Hollywood studios to make a deal with performers who provide voices and stunts for games.

Sag-Aftra, the Screen Actors Guild-American Federation of Radio and Television Artists, announced the move late Monday, saying that 98% of its members voted to go on strike against video-game companies if negotiations are not successful.

Some of the same issues are at play in the video-game negotiations as in the broader actors’ strike, including wages, safety measures and protections on the use of artificial intelligence.

Lois Beckett and agencies contributed reporting

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Las Vegas hospitality workers vote to authorize strike

Hospitality workers in Las Vegas have voted to authorize a strike if their union does not reach a contract deal with dozens of hotels on the Las Vegas strip.

Thousands of workers attended the strike vote on Tuesday at the Thomas & Mack Center on the University of Nevada – Las Vegas (UNLV) campus. The union slogan headlining the event was: “One job should be enough.”

Of the 53,000 members, 95% voted in favor of authorizing the strike.

“Companies are generating record profits, and we demand that workers aren’t left behind and have a fair share of that success,” said Ted Pappageorge, secretary-treasurer for the Culinary Union, in a statement.

“As companies reduce labor, there are less workers who have even more responsibilities and are doing more work instead of spending quality time with their families, and that has to change. Workers have built this industry and made it successful and that’s why we are demanding that workers share in that prosperity,” he said.

Pappageorge said the two sides were still “far apart” after months of negotiations with the largest three gaming companies in Las Vegas.

Among the asks from the union include “winning the largest wage increases ever negotiated in the history of the Culinary Union” amid high inflation rates in recent years, the high cost of living in Las Vegas, and furloughs during the beginning of the Covid pandemic that greatly affected hospitality workers.

The union is also pushing for reducing housekeeping workloads, mandating daily room cleaning, which was eliminated throughout much of the hotel industry during the pandemic, expanding safety protections for workers on the job, and adding clarifying language to a no-strike clause that gives casino workers the right to respect picket lines and does not prevent the union from taking action against non-union restaurants on casino properties.

“My job got so much harder since the pandemic and I’m in constant pain at work. When I get home I feel guilty that I don’t have energy to spend time with my son, help him with his homework, or even cook dinner some nights,” said Evangelina Alaniz, a guest room attendant at the Bellagio and a Culinary Union member for 18 years. “Often, I have to go to bed so I have enough strength to go to work the next day and serve the guests.”

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The union has not yet set a strike deadline, but workers are currently working under expired contracts at 22 locations among MGM Resorts, Caesars Entertainment, and Wynn/Encore Resorts. Negotiations began in April, with contract extension agreed upon in June that expired in early September as the union noted a lack of substantial progress.

In 2018, 25,000 hospitality workers voted to authorize a strike, with contracts settled with employers soon after the vote.

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Bankman-Fried asks judge for three suit jackets and slacks to wear at fraud trial

Sam Bankman-Fried, the jailed former cryptocurrency billionaire known for his casual appearance, has asked a US judge for permission to dress up for his forthcoming fraud trial.

In a Tuesday night court filing, Bankman-Fried’s lawyers asked a judge to order US marshals and Brooklyn jail officials to provide their client with three suit jackets and pairs of slacks to wear in the courtroom.

They also asked that Bankman-Fried be given four dress shirts, three ties, one belt, four pairs of socks, two pairs of shoes and “appropriate undergarments”.

The request will be reviewed by the federal judge Lewis Kaplan in Manhattan. Bankman-Fried’s trial is due to begin on 3 October and could last six weeks.

Jailed inmates do not have access to their own clothing. Judges often let them wear business attire in court, to avoid possible juror bias if they wore prison garb.

Bankman-Fried, 31, has pleaded not guilty to stealing billions of dollars in customer deposits from FTX, the now-bankrupt cryptocurrency exchange he founded in 2019.

As he rode a boom in bitcoin and other digital assets to an estimated $26bn fortune, Bankman-Fried was known for his unkempt mop of curly hair and wearing rumpled shorts, T-shirts and sneakers even when entertaining the likes of former US president Bill Clinton and ex-British prime minister Tony Blair.

Kaplan revoked Bankman-Fried’s $250m bail on 11 August and remanded him to the Metropolitan detention center in Brooklyn after ruling he likely tampered with witnesses.

At most court appearances since his December 2022 arrest, Bankman-Fried has worn suits. He wore a beige-colored prison uniform at an August hearing following his jailing.

In July, federal prosecutors asked the court to jail the defendant, saying he “crossed a line” by sharing his former romantic partner Caroline Ellison’s personal writings with the New York Times. They argued that such press was intended to discredit Ellison, who is expected to testify against him at his scheduled 2 October trial.

Bankman-Fried had previously been largely confined to his parents’ home in Palo Alto, California, on $250m bond after being extradited from the Bahamas, where FTX was headquartered.

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